Business/Consumer Services

Harris swings to first-quarter loss on charges

SaabiraChaudhuri

Harris Corp.
HRS, -0.95%
swung to a fiscal first-quarter loss as the military contractor saw its revenue fall, and also recorded a large non-cash impairment charge related to its discontinued operations.

Earlier this year, Harris said it would sell its broadcast communications business as a review had shown the unit to no longer be aligned with its long-term strategy. The company said it would use proceeds from the sale to return cash to shareholders and invest in its core businesses.

On Monday, the communications and information-technology company noted that it had recorded non-cash impairment charges in discontinued operations for the broadcast communications segment and also its cyber integrated solutions arm, totaling $222 million.

Chief Executive William M. Brown called the company's results "solid in a challenging government spending environment."

For the period ended Sept. 28, Harris posted a loss of $85.8 million, or 76 cents a share, compared with a profit of $121.6 million, or $1.01 a share, a year earlier. However, excluding write-downs, acquisition costs and other items, earnings from continuing operations rose to $1.14 a share from $1.09 a year ago.

Revenue fell 5.6% to $1.26 billion.

Analysts polled by Thomson Reuters expected a per-share profit of $1.12 on $1.3 billion in revenue.

Orders in the first quarter were $1.38 billion compared with $1.48 billion in the prior year.

Harris, which backed its prior earnings and revenue guidance for the year, had been diversifying its businesses through acquisitions in recent years as constrained U.S. government spending dampens Defense Department orders and revenue. However last week, Harris said it had been awarded a contract from the Defense Department with a potential value of $397 million to continue providing it with its Falcon III handheld tactical radio systems.

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